Nokia’s troubles might force Microsoft to bail it out

Nokia’s troubles might force Microsoft to bail it out
More than a year after announcing Symbian is a “burning platform” and with a 1-year gap until the first Windows Phone handsets arrived, Nokia has lost its position as the leading smartphone maker and later on, as the top global cell phone manufacturer. The company has posted huge losses in the last quarter, and expects a similar or worse second quarter, and analysts agree that if the situation starts to get out of control, Microsoft will step up and provide a bail out.

And that’s already on top of existing financial support that Microsoft provides to the Finns. We’ve already previously heard rumors of Microsoft acquiring Nokia, or some part of it, but it seems that most bankers disagree with this exact scenario. What may happen, though, is that Nokia might get billions of dollars.

"I don't see Microsoft owning Nokia, but it would definitely provide financing to the tune of a couple of billion dollars," a “veteran technology banker” spoke for Reuters.

Microsoft certainly has the cash to step in. With $58 billion in total cash, the company can provide a helping hand, but it would definitely be an uncommon practice as it could be interpreted so that Microsoft favors one hardware company.

At the same time, the deep interconnection between Nokia and Microsoft, makes the Finns an unlikely target for other phone makers looking to invest. Nokia is currently trying to sell its luxury unit Vertu, but its sale will only contribute a couple hundred million dollars. Other assets Nokia has are its mapping business, which it sees as an advantage and might abstain from selling, its strong patent portfolio, which Microsoft will want to prevent from ending up in competitors’ hands, and its Nokia Siemens Network. Whatever decisions are taken, it seems certain that they will be tough ones.

source: Reuters



1. AppleConspiracy

Posts: 637; Member since: Oct 18, 2011

Everything is going according to plan in conspiracy theories - Nokia, with Stephen Elop as a head, purposively sabotaged it's marketing to reduce it's price for Microsoft aquisition. This was obviously the plan. Not financial help, but aquisition, the Microsoft's answer to Google's aquisition of Motorola Mobile, to gain myriads of patents.

2. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

yeah Steven Elop that bastard

18. mercorp

Posts: 1045; Member since: Jan 28, 2012


45. taz89

Posts: 2014; Member since: May 03, 2011

i would buy a nokia android device without a thought..always been a fan of nokia and had mostly nokias until much wp looks nice for someone who likes to do wahtever with the phone.wp is not for me.

50. steelicon

Posts: 318; Member since: Apr 02, 2011 This is what happens when you abandon something wonderful. Someone takes it away and then you realize you've thrown away the family jewels.

3. allen83

Posts: 107; Member since: Mar 01, 2012

Go Meego Go!!! Go Symbian Go!!! If I'm the CEO of Nokia I would develop Meego, Meltemi and Symbian. Meego as the high end functionality plarform, Meltemi on low end platform and Symbian to be develop as a high end camera platform. And windows platform as a second platform. Now does it make any sense?

4. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

that what even a 5 year old would do just as long as he doesn't work for MS

10. snowgator

Posts: 3621; Member since: Jan 19, 2011

A common idea. But, honestly, only about 2/3rds of that idea was practicle. The problem was the R&D department had grown so large and inefficient that it was draining the profits away. Different levels of development were fighting each other for position. Throw in MeeGo and it's development- a brand new software, no app support, no name recognition, and all the development needed for all the seperate countries and markets Nokia sold in. The development pace of Android and the marketshare of Apple and RIM (still a strong force worldwide, especially in 2009/2010 when Nokia was making these decisions) really was sobering for them as their profits dwindled even while being the #1 phone maker. Throw in their non-existent sales in the US, the largest consumer nation in the World, and something HAD to change. It cost a CEO his job. I liked the idea to keep a strong line of Symbian devices going. That was where Nokia had their bread-and-butter profits, along with their strong feature and basic phone sales. Just slow down the rate of development, and support a few great Symbian devices and a few low end ones. Nokia had cash researves onhand, and could ride out the transition phase. Making Windows Phone their second line of devices, or their primary depending on what Microsoft offered them, would mean all the advantages of sharing the cost they have now would still apply. As well received as MeeGo was, it was an expensive, long term transition which made no sense. Nokia did not have the ability to start an OS from scratch. Look at how hard of a job RIM is having getting BB10 out. Even Samsung is rethinking it's Bada OS. I still believe Nokia will be fine in the long term. But, it did not need to be this painful.

16. allen83

Posts: 107; Member since: Mar 01, 2012

Yes it shouldn't be this painful. But as for Meego many communities pledge to support its softwafe even though it is new. The question is why did Nokia turn it down if you will have the support of many communities. Because the community are the ones that dictates the wants or demands of the manufacturer. Only if nokia listens to the consumers so sad...

17. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

it's steven elop he sort of killed of meeGO so it doesn't compete with lumia device

25. remixfa

Posts: 14605; Member since: Dec 19, 2008

it doesnt matter who pledges to support it, if consumers are only buying apple and windows, its not just a DOA system, its a huge money sink. With their partnership with MS, not only did they get a big cash advanced, they also saved hundreds of millions on development, R&D, support, and more. They stopped shouldering the full responsibility of everything and basically just became a hardware company with strong GPS and camera portfolios.

33. Pdubb

Posts: 249; Member since: Aug 08, 2011

My god you are a smart man. I just cannot understand why people do not see what you are saying. So simple a caveman could see it.

40. PhantomRyan

Posts: 2; Member since: May 08, 2012

I Partially Object to this statement: Firstly windows phone isn't a hot seller! So as the record shows, you would have stand correct if u said Apple & Android are what the consumer demand!

47. remixfa

Posts: 14605; Member since: Dec 19, 2008

oh, my faux pas. I ment to say apple and android, not windows.. lolol. That should have been obvious :) too many thoughts runnin at the same time! :)

29. -box-

Posts: 3991; Member since: Jan 04, 2012

Agreed. Much like how Samsung supports multiple OSes (Android, WP7, and its own bada) Nokia could have/should have, kept a strong portfolio and development of Symbian (my preferred daily-use OS), introduce competive WindowsPhone devices (as they are doing, which I'm also liking), and have one or two MeeGo devices per year as a sandbox for new concepts, much like the N-series was. That way the old faithful customers get what they're used to (Symbian), the adventurous ones get to try the exciting and fresh new concepts (MeeGo), and those that want something with wider support across multiple manufacturers with a fresh start from other OSes get it as well (WP). As for Android, maybe in the future they'll do it, but with so many manufacturers already in it, it's hard to make one brand, even one as legendary and popular as Nokia, stand out from the crowd

48. remixfa

Posts: 14605; Member since: Dec 19, 2008

you missed the entire point of my first comment. Samsung is in a MUCH healthier position than Nokia. You wanted nokia to spend millions and millions to support systems that were on the way out the door. If I demanded that you keep paying to fill up my gas tank with no return to you, would you keep doing it? Thats pretty much what your asking of Nokia. That route would have slowly choked the company to its death knell. Instead, they got a partner that PAYS for all those expenses and are burning away all the expensive fat off of their operations. People just have to get past the death of symbian and meego. Its time to look to the future. Its time to realize that in order for Nokia to survive, they not only had to make drastic changes, they have to drastically SHRINK into a much more nimble and profitable company for the LONG TERM, which is what they are currently trying to do.

5. Stoli89

Posts: 333; Member since: Jun 28, 2010

I suspect Nokia will continue to report losses for Q2 and begin its run from red to black by mid Q3. Fundatmentally, its performance is also subject to WP8's launch in time for product launches on or before Novemberr'12 as well as how quickly it implements its restructuring so that 2013 is subject to less one off losses. 2012 is the year where Nokia takes as much on the chin as possible, so that 2013 has much fewer internal headwinds. Nokia has enough cash on hand to manage this at current cash flow levels. However, if Lumia fails and/or the bottom falls out of the Asha next billion strategy, it's gonna get really bad. I tend to think, based on current US market performance, that there is light at the end of this tunnel for Nokia. Execution has been pretty stellar consdering the decision to move to WP was made just over 1 year ago. As for Meego/Maemo/Harmattan...seems to me that much of this past investment will be recouped in the Meltemi next billion strategy.

6. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

Android fanboys are gonna love this article. On top of they'll say bad stuff towards Elop. I'm not surprise seeing these those bad attitude. The same people who call iPhone owners sheep. Moreover PC Linux users have also same attitude. Yes Nokia is going through s**t time and it'll be like that for 2yrs. It make sense since they are very late in the game. And now Samsung is taking the Windows Phone race seriously with Windows Phone 8 coming this october. I'm more optimistic about next year, Nokia will be in momentum.

7. RobotMan

Posts: 145; Member since: Apr 13, 2012

No need to say bad thing as we all can see the result of Elop decisions to only support MS.


Posts: 4851; Member since: Apr 13, 2012

Since he took over Nokia went down, Nokia and BB Are in the same path, gone done dustead....

11. snowgator

Posts: 3621; Member since: Jan 19, 2011

Microsoft does not- really they don't- want to be a hardware maker. Why take on that headache? Yes, I know they produce the XBOX, so it really isn't a huge strech to say MS could do it. My question is- Why? What would be the purpose? What would be the advantage? They will give Nokia cash in a heartbeat to help keep them afloat. They will figure a way to keep the other WP producers happy, especially Samsung who's global success MS needs and HTC who helped push WP out in 2010 to a degree no other manufacturer would. But MS needs Nokia and their name. Those two have way too much invested in this partnership. Look for a nice cash loan and at least another year of WP branded Nokia's. By Q2 2013, things had better be on a serious upswing.

49. remixfa

Posts: 14605; Member since: Dec 19, 2008

no worries, they will be. This is just the restructure and the warm up for the big party, which is WP8. People are just too short sited to see it. Whats left of Nokia after all of this will be nimble, ready to fight, and profitable on a much smaller scale than was needed with the "old nokia". It just takes a bit of time.

12. Glim12808

Posts: 394; Member since: Oct 26, 2011

Elop became CEO of Nokia only on September 2010. By the time he became CEO, marketshare for Symbian had been down down for months, in fact almost a year already. By the time he stepped-in, there was no saving it. I doubt there ever was a way to save it at all because the previous CEO tried but could not! Symbian is just way past its time. And Elop also knew that MS was the only one who needed Nokia so badly it would put out billions to help the company. I'm sure Elop also thought of Google but must have concluded that Google did not need them as much, and was only interested in a buy-out. I 100% believe Elop did the right thing in going to MS in order to save the company!

13. Glim12808

Posts: 394; Member since: Oct 26, 2011

As to Meego, they tried it but it also hit a ceiling and then started to go down. Unfortunately, Nokia did not have the billions to spare in their arsenal to promote it. Meanwhile, they needed the billions of MS to tide them over. And the only way MS was willing to put out the billions was for Nokia to make WP its sole platform. Elop did the best he could for Nokia under the circumstances. I congratulate him!

14. AppleConspiracy

Posts: 637; Member since: Oct 18, 2011

You have just accurately missed the point. Nokia was slow and ignorant regarding the paradigm shift cause by the iPhone arrival in 2007/2008. And then Elop came in to restructure it - and that was eactly what he was NOT doing. Firstly, he announced collaboration with Microsoft instead with Google, a very risky pact that was meant to promote already published OS that was very restrictive and closed, and most of all, despite being well executed in terms of design and user experience - very unsuccesful. So, Nokia and Elop put everything in utterly unstable platform, and gave us promise that it will be the new success. We were suppose to believe them, but why? We have already get used to a new paradigm without Nokia and Microsoft. And then, it took them a whole year to publich their first WP phone. One year is a lot in tech world. In this time, they plummeted even more, and made even more mistakes, which leads us to MeeGo: when N9 with MeeGo was announced and preliminary tested, it brought a genuine, rarely seen excitement of fresh OS and marvelous hardware design. They almost din't need any paid marketing - the thing became already so viraly popular that it would be an instant hit. And then they decided to shut down MeeGo and pronounce it a "dead platform". On purpose. They still continued to release Symbian phones, a "burning platform", but they give up on superior MeeGo. And then they released Lumia 800 as their main entry point for Windows Phone, with nothing new already - it was same "old", already seen N9 (even inferior in some areas!), but with OS that has nothing exiting about in social context, that has been around for almost two years without any success! And that's how they destroyed themselves. Is it possible it was all just enormous stupidity when it's all crystal clear even to most uneducated consumer? I don't think so. I preffer to think this was all very elaborate sabotage, step-by-step perfectly executed destruction of Nokia. For some greater purpose, of which I know nothing about.

22. Glim12808

Posts: 394; Member since: Oct 26, 2011

I give you that they did not prepare for the arrival of iPhone but that was long before the time of Elop so he had nothing to do with that! Also, you are forgetting that Elop did not go to Nokia to apply, The board of Nokia pirated him by offering him a lot of money to transfer to Nokia. The board knew they could not get billions from Google because Google did not need them that much so the only hope was MS. They also knew MS would not trust them enough with those billions unless somebody that MS trusts heads Nokia, hence the piracy. The rest are just your rantings against Windows Phone. As to Meego, Nokia tried it but if you look at the sales of N9, it quickly plateaued and started going down. That viral thing you mentioned is just in the geeks' imagination. It needed to be marketed but Nokia did not have, does not have, the billions necessary to promote it. The problem was compounded by the fact that no U.S. carrier wanted to touch it. There was no other choice but to shut it down. To properly put out a device in a new platform, an OEM needs about a year and a half of developement. So Nokia should have shifted to WP late 2009. But Elop was still working at Microsofl during this time. Elop came into Nokia only in September 2010. I'm sure behind-the-scene negotiations between Nokia's board and Elop on one hand and MS on the other hand started as soon as Elop took office. But billion dollar negotiations don't happen in a day. It was only in February 2011 that things got firmed up enough for Nokia to be able to announce they were going to do WP as the main platform. Nokia's hope at the time was for their Symbian smartphones to hold up sales until WP can take hold. Unfortunately, an internal memo on the "burning" status of Symbian was leaked out, probably by people inside Nokia who were unhappy the board got Elop as CEO instead of promoting someone from the inside. As soon as that memo leaked, Symbian sales plummeted. I don't know why people keep insisting Meego is the saviour of Nokia when all you need to look at are the sales! It hit a ceiling early and started goin down. Had U.S. carriers wanted to carry it, maybe it would have had a fighting chance. But they did not, so there you go! Nokia was very fast in putting out, at an unheard of pace of 8 months, the Lumia 800, which was the only one they could put out at the time.Thanks to the leadership of Elop! Nokia is in a transistion period so things are looking bleak.Meantime, the Lumia 900 is doing fine, until WP8 comes out when they can then produce phones from "hero" devices to cheap phones that can take over the market for their S40 feature phones.

37. rafael.roque

Posts: 78; Member since: Jul 03, 2010

Point and case: Until today N9 has sold more than Lumia devices even though the N9 didn't get any advertisement, and Lumia don't even let me start talking about advertising with lumia . From where i see it Steven Elop was working for MS the whole time first to start off with calling Symbian and meeGO a dead platform and killing them both, 9 month before the release of any Lumia devices then before the release of the N9 he says they will be no support for it and announces Nokia sea ray release soon (Lumia devices) what type of CEO does that it's like saying don't buy our products we are making better ones soon he was always in it for Microsoft . he then released the n9 in limited countries cause he didn't want competition with Lumia devices when they come out

19. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

EVERY ONE JUST PLEASE LISTEN THIS IS WHAT REALLY HAPPENED Until today N9 has sold more than Lumia devices even though the N9 didn't get any advertisement, and Lumia don't even let me start talking about advertising with lumia . From where i see it Steven Elop was working for MS the whole time first to start off with calling Symbian and meeGO a dead platform and killing them both, 9 month before the release of any Lumia devices then before the release of the N9 he says they will be no support for it and announces Nokia sea ray release soon (Lumia devices) what type of CEO does that it's like saying don't buy our products we are making better ones soon he was always in it for Microsoft . he then released the n9 in limited countries cause he didn't want competition with Lumia devices when they come out what he should have done was: 1.keep Symbian for low end devices (not series 40 phones) and to keep Symbian fans satisfied and happy. 2.keep the meeGO line running because as I already mentioned it did great and a lot of people didn't get it when they heard there will be no support (NOT A VERY SMART MOVE AND HE DID IT ON PURPOSE) and what's the result MeeGO goes and joins Tizen which is what is currently being produced by Samsung HELPING the opposition great job elop 3.use windows phone and MeeGO to get in the american market and get a lot of sales even a baby could bring the company to success using these steps 4th Nokia can't win this with OS look at Samsung they're using four OSes

20. pikapowerize

Posts: 1869; Member since: May 03, 2012

they shouldn't invest too much on something that people isn't used yet! they should go back to meego! and keep that "meltemi OS" and "SmarterPhone OS" on work fast! never go on android! WP is too restricted! and people who are using nokia device isnt use to that! they do not know what is WP yet! i still hope WP8 will change that!! i'm still hoping!

21. 99n100

Posts: 16; Member since: Apr 06, 2012

So What? Does it mean the end of the game for Nokia? What will Microsoft achieve (they have money) and What can Nokia gain (Cash out)? Who benefited the most (the middleman Stephen Elop)? Haha....:-)

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